National Conference Of Insurance Guaranty Funds

National Conference of Insurance Guaranty Funds (ncigf) is a business association as defined within internal revenue code section 501(c)(6) which advances the collective missions of its members and provides National assistance in various areas for property and casualty Guaranty Funds. Ncigf assists in the coordination between the liquidators and property and casualty Guaranty Funds in multi-state insolvencies, monitors litigation and legislation affecting Guaranty Funds, conducts various educational and training programs, provides information concerning the property and casualty Guaranty fund system; and provides a forum for discussion of Guaranty fund related issues.

Ncigf provides operational support, communications and public policy development to its members, the state property and casualty Insurance Guaranty Funds. The ncigf also assists property and casualty Insurance Guaranty Funds by providing them with current legislative information and educational training opportunities.see schedule o for 2023 service accomplishments highlights.highlights of our 2023 accomplishments include:mitigating "readiness risk": Guaranty Funds have a rich history of adaptation and flexibility during those rare occasions when an Insurance company becomes insolvent. As the Insurance industry continues to evolve its technology and business practices and responds to public policy changes, the challenge for the Guaranty Funds to adapt grows steeper. Ncigf is amid a multi-year initiative to smooth the frictions that pose a threat to the ability to respond promptly to consumers.focus on pre-liquidation planning:ncigf continues to promote earlier pre-liquidation planning in various forums. Because of the need to transition data immediately when the Guaranty Funds are triggered and the complexity of products such as large deductible and cyber liability, this planning needs to begin before a formal insolvency proceeding is ordered. This year the "e" committee at the naic adopted a pre-liquidation memorandum of understanding (mou). It is now available on the ritf website for use by insolvency practitioners. Moreover, the mou and accompanying revisions to various handbooks have been referred to naic working groups that address troubled company issues before a formal insolvency proceeding is commenced. We expect action on these referrals in 2024.restructured business:statutes that authorize Insurance company divisions or Insurance business transfers (ibts) continue to be adopted in various states, generating concerns about the status of Guaranty fund coverage. The matter is particularly urgent in that both division statutes and ibts make it clear that there is no remaining liability on the part of the transferring entity for the claims transferred under these statutes. The ncigf board of directors adopted a position on this matter stating that if coverage existed on a claim before the restructuring transaction it should remain in place after the transaction. Conversely, if coverage was not available before the transaction it should not be created by the transaction. As many current Guaranty fund laws may not resolve these claims in this way, ncigf developed a statutory remedy. This remedy has been adopted in four states and efforts continue to promote the amendment in additional jurisdictions. Most recently a draft in this regard has been recommended to the receivership and insolvency task force (ritf) at the naic. The naic is in the process of reviewing this draft.resolution partnership with receivers and regulators:ncigf worked on securing and implementing improved practices for data transfer in receiverships throughout 2023. A revised receiver's handbook was adopted by the naic with favorable language offered by ncigf on Guaranty association issues, including the importance of pre-liquidation planning. The new handbook includes a "large deductible guideline" adopted in a prior year which calls for the deductible asset to flow in full to the Guaranty Funds to the extent of their claim payments, rather than be treated as a general asset of the estate, resolving a 20-year-old dispute between Guaranty Funds and Insurance receivers. The pre-liquidation memorandum of understanding adopted by the naic receivership and insolvency task force in 2022 is now referenced in handbooks used by it examinations and the financial analysis solvency tools (fast) working groups. It is also referenced in the financial analysis working group (fawg) materials. This development is important because it supplies regulators access to these materials before a public insolvency proceeding is invoked. This will be critical to successful pre-liquidation planning.cyber coverage and restructuring remedy:in 2023 ncigf worked with state Guaranty associations, industry, and regulators to promote the enactment of language at the naic and in individual states. Amendments relating to restructured business and cyber coverage were adopted by the naic in late 2023 and are now incorporated in the naic property and casualty Insurance Guaranty association model act. These amendments are the result of several years of efforts working with regulatory committees at the naic. The cyber coverage amendments were adopted as proposed by the ncigf. These changes call for reasonable coverage limits and address services provided under cyber policy. Three states have adopted cyber amendments, and the measure is pending in two additional states in 2024. The restructuring amendment's primary option is consistent with ncigf policy in this regard- Guaranty fund coverage should not be changed by the business transaction- claims that originated from Guaranty fund covered policies would be covered after a restructuring and claims that were not covered before would not be covered after the transaction. Four states have enacted restructuring amendments consistently and multiple other states have it under consideration.preliquidation planning:ncigf was a strong proponent of earlier pre-liquidation planning throughout 2023. A primary focus of effort was to stress that planning and coordination with Guaranty Funds prior to a public insolvency proceeding is critical to a seamless transition for policyholders. Ncigf delivered this message to regulators and receivers in numerous forums throughout the year. A unique tabletop exercise was conducted at the november meeting of the naic. Over 100 regulators participated, most of whom were commissioners or regulatory staff involved with troubled companies before a public proceeding occurs. As a result of this highly regarded session, ncigf and nolhga were invited to conduct a similar exercise at a commissioner's summit event in february 2024. Ncigf hopes to build on the success of these two events in collaboration with the naic to conduct this type of exercise at future regulator events.troubled companies:as part of revisions to the naic holding company act, ncigf worked with the receivership and insolvency task force (ritf) to add provisions to address troubled companies, specifically continuation of third-party services and ownership rights to claims data. These provisions have now been adopted in 15 states and are pending in multiple states. The community understands that the new holding company language has already been a helpful tool for regulators and receivers dealing with troubled companies and it is expected that laws such as this will be a key component of a seamless policyholder transition during liquidation.2023 tabletop exercise:a tabletop insolvency simulation exercise was conducted at the 2023 ncigf fall workshop. Designed and implemented by the ncigf innovations and operations committee, the exercise offered not only a time for educational interaction, but also created opportunities for connections, solution sharing and networking among the ncigf member Funds. 'common solutions for shared problems' was the theme of the collaborative session, which included participants sharing top takeaways in the large group environment. The innovations and operations committee has already begun planning the next steps for the takeaways and information gathered during the session and has plans to feature this exercise and its materials in a downloadable resource format for 2024.2023 legal seminar:the ncigf 2023 legal seminar was held in minneapolis, mn in june 2023. The legal seminar task force cultivated an environment and opportunity for approximately seventy (70) individuals from varying backgrounds and roles to share perspectives and explore trending topics on Insurance and insolvency matters. Topics covered included, reinsurance, case law updates, and issues that evolve from the modernization of the workplace including legal obligations with diversity, equity, and inclusion (dei) initiatives the seminar provided participants with new insights and information and bolstered their general knowledge of Guaranty fund law. The 2025 legal seminar task force is hard at work planning the next legal education Conference.